appleLooks like it will face a new tax evasion crime in Japan. Using a loophole in tax-exempt shopping rules, customers avoided paying nearly $98 million in taxes by purchasing Apple devices.
Apple ‘missed’ $98 million in taxes in Japan
Foreign tourists in Japan do not have to pay the 10% excise tax if they stay in the country for less than six months. So tourists can buy iPhones and other devices tax-free. However, it was found that some people bought hundreds of iPhones from Apple stores using this tax exemption.
According to the report in Nikkei Asia, users shopping at Apple Stores caused a tax gap of 98 million dollars. It was stated that after Apple realized this situation, it stopped its tax-free shopping support and stopped the service.
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Research by Japan’s tax authorities found 24,000 purchases where companies did not report their excise tax payments during the year until June, creating a deficit of 86.9 billion yen ($651 million) in past taxes.
Japan has been focusing on tourism and consumption since 2012. It is expanding its flight areas and duty-free shops. Tax-free shopping, a measure of tourist shopping habits, reached a record high of 340 billion yen ($2.5 billion) in 2019. However, as with Apple, it can open the door to some scams.
According to Apple’s latest fiscal annual report for 2022, sales in Japan totaled $26 billion.
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